Yala Music Announces Ad-Based Downloads: Pushing Back Against Anghami

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Yala
Music, currently their biggest in-region competitor, is now
announcing that they're unlocking their Arabic music library
worldwide by offering free ad-sponsored downloads.

It's a new revenue model for Yala Music, which launched in 2010 to
offer music fans the ability to stream and download over 100,000
tracks from 5,000 artists. With its headquarters in France, and
offices in Morocco, Egypt, Lebanon, and the UAE, Yala, one of the
first music streaming platforms in the region, has reached 1
million downloads.

Their first ad sponsor, Pepsi, should help
the platform monetize as it works to recover from a traffic slump
in 2012.

Whether browsing on web or mobile, global
users will watch a 20 second ad video before downloading any song
in Yala's database for free. Yala Music offers applications
for iOS, Android, Samsung, Nokia, Blackberry and Windows, and
a desktop version currently only available for Windows.

This ad revenue model stands in contrast to Anghami, which
currently offers unlimited online and offline streaming via its mobile app for free. In
March, a paywall will go up, allowing users unlimited streaming of
over 1 million tracks for $5 a month, while a free option while
continue to offer a limited number of hours. In countries like
Jordan, the premium service will be free for Orange subscribers, a
model Anghami intends to scale across the region.

It will be interesting to see whether advertising or a subscription
model appeals more to customers in the region; the question
of how to best monetize streaming platforms is still looming
in the local music
industry.

Yala founder Patrick Chassany insists that here Yala's model is
more amenable to the local market. "Anghami is a new competitor.
Their model is trying to replicate an existing model, similar to
Western music services, in a region that has specific needs and
particular music consumption habits."

Anghami co-founder Elie Habib counters that
"We do not believe in a model whereby a user is forced through an
ad to get the music, nor in a scalable advertising subsidization -
this is why Anghami is launching with several mobile operators
reducing the cost to the user."

Neither model is exactly unique to
the Arab world. The success of either platform will also depend
upon their catalogues and securing rights to the region’s largest
music labels and distributors. While Anghami recently secured
exclusive streaming contracts with Rotana in Lebanon, the UAE
and Saudi Arabia, Yala Music also has a worldwide distribution
contract with Rotana. Anghami offers international music as well,
though Yala Music is just behind them, currently in talks to begin
offering popular international tracks and artists in the next few
months.

A strong music discovery tool,
through recommendations, will also be a critical element for luring
users to either platform.

The regional race for market supremacy could also be complicated
should another international
platform like Sweden-based Spotify, France's Deezer, or Swedish-built Rdio choose to throw their hat into the
ring (we hear Deezer is entering the market- more on that soon).
For now, we’ll have to wait to see how consumers react.